Indonesian Suppliers Struggle with Long Vessel Queues

Indonesian thermal coal suppliers are struggling with long vessel queues at South Kalimantan due to delays in loading amid bad weather -- disrupting the supply flow, sources said.

A major Indonesia-based producer source said that they have around 20 vessels for loading and are waiting at Muara Satui Anchorage and Tanjung Pemancingan Anchorage.

"Normally rainy season lasts until March or April but I guess nothing is normal nowadays," he added. Barring a few vessels waiting to load under term contracts, he said most of the vessels are for spot shipments.

Around 44 coal ships are lying idle in South Kalimantan since mid January, S&P Global Platts C-flow vessel tracking software showed. According to shipping sources, as many as 25 vessels are waiting to be loaded at Taboneo anchorage in the Banjarmasin port of South Kalimantan, compared to 17 vessels a week ago.

Another Indonesia-based producer said that heavy rains in December resulted in a loss of around 200,000 mt of monthly production, which spilled over to January. He doubts he will be able to offer anything until March and thus would miss the benefit of the current strong prices in the spot market.

January to March is typically a monsoon season for the country and usually Indonesian miners plan their shipments accordingly.

As of Monday, the daily coal consumption rate at six major utilities in the coastal region averaged 810,000 mt/day, with stocks lasting for about 11-12 days of consumption, compared to 757,700 mt/day as of January 2, according to Qinhuangdao Port data.

The second Indonesia-based producer said that power utilities in China, specifically in the northern part of the country, are running low on stocks.

"We are trying to reschedule our shipments, so that we don't have to deal with vessel queues," another major producer source said.

He said that they were seeing an impact of 20-30% year on year in production this month due to rain.

"A number of miners are paying huge demurrage," the second producer source said, adding that five of his vessels are waiting at the ports currently.

An Indonesia-based trader said that the rain is largely impacting loading rather than production and as a result, miners and ports have stockpiles but they are not getting delivered to the vessel on time.

One of his vessels at Tanjung Bara Port Terminal is waiting since last 12 days for the cargo, while generally it only takes two days to load a Panamax, he added.